from their enactment. In this case, it will be the domestic operator, which frequently calls at U.S. ports, that will bear the administrative burden of compliance.

CONCLUSION

Section 101(a) of S. 865 states as a finding and declaration that "it is in the national interest to develop and maintain a viable marine transportation system for the United States, including an integrated network of deep-draft commercial seaports adequate to accommodate the needs of foreign and domestic commerce, promote economic stability and provide for the national security of the United States and its allies."

We concur wholeheartedly.

Moreover, we are extremely

pleased to see that the legislation wisely recognizes the strong link between a modern port network and a viable marine transportation system. Indeed, that thought has been the essence of our remarks today, together with the warning that it is foolhardy to pursue the development of one at the expense of the other. And that, Mr. Chairman, is the fundamental failure of the proposals now under consideration. In their present form, they will sap the resources of America's domestic merchant marine to fund the

development of America's ports.

Sonat Marine believes that if it is truly in the national interest to develop and maintain a modern, integrated port system, the funding for that development and maintenance should continue to be, as it historically has been, a responsibility assumed by the nation as a whole. According to a recent study by the American Association of Port Authorities, the U.S. port system, by virtue of the customs receipts which it generates, provided the federal treasury with $6.5 billion in Fiscal Year 1982. This amount represents 70 percent of total customs receipts collected in that year. Additionally, of the 1.3 billion tons of cargo which moved in and out of U.S. deep-draft ports in 1981, 65 percent was foreign trade cargo. Therefore. it makes impeccable sense to us that a port development policy which seeks to foster America's foreign commerce through the timely maintenance of our ports should be funded through the use of customs receipts.

Mr. Chairman, in summary, allow me to review the essential points which comprise Sonat Marine's position on port development legislation:

the cost of operating and maintaining existing U.S. channels and harbors should be funded through the use of customs receipts;

the true beneficiaries of port and channel deepening should be identified, and should fund those projects from which they benefit:

the imposition of port development user fees on vessel operators who derive no benefit from either port deep·ening or the maintenance of existing port depths is both unfair and injurious;

the domestic merchant fleet would suffer the greatest negative financial impacts and administrative burdens of port development legislation currently before this Subcommittee, and would receive little or no tangible

benefits;

the impacts of this port development legislation would lead to the further demise on the domestic U.S. fleet, which would directly conflict with the longstanding maritime policy embodied in the Jones Act; and

the ad valorem based tax discriminates against the U.S. coastwise domestic fleet, much of which is engaged in the carriage of petroleum products, and provides no relationship between the fee imposed and the benefits derived.

Thank you for this opportunity to present our thoughts on an issue which will have substantial impact on the future viability of both Sonat Marine and the U.S.-flag merchant fleet. I will be glad to answer any questions that you may have.

REMARKS BY GEORGE J. RYAN

PRESIDENT, LAKE CARRIERS' ASSOCIATION

SUBMITTED FOR THE RECORD OF THE COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
SUBCOMMITTEE ON WATER RESOURCES

JUNE 21, 1983
WASHINGTON, D. C.

MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:

I AM GEORGE J. RYAN, PRESIDENT OF LAKE CARRIERS' ASSOCIATION. OUR MEMBERS ARE THE OWNERS OF U.S.-FLAG BULK SHIPS SERVING IN THE DOMESTIC TRADE. CARGOES INCLUDE IRON ORE FOR GREAT LAKES STEEL MILLS IN ILLINOIS, INDIANA, MICHIGAN, OHIO, PENNSYLVANIA AND NEW YORK; COAL FOR DOMESTIC POWER GENERATION AND EXPORT; GRAIN FROM MIDWESTERN FARMS; LIMESTONE, CEMENT, SAND AND PETROLEUM PRODUCTS.

THIS IS ABSOLUTELY THE WORST TIME TO BE CONSIDERING INCREASED TAXES IN THE FORM OF PORT USER FEES. THE 1982 RECESSION YEAR CAUSED SEVERE HARDSHIP IN THE MIDWEST AND THIS YEAR IS SHOWING ONLY SMALL SIGNS OF IMPROVEMENT. MINING TOWNS HAD MORE THAN 50 PERCENT UNEMPLOYMENT AND URBAN STEEL MILL CITIES HAD UNEMPLOYMENT UP TO

20 PERCENT.

LESS THAN 50 PERCENT OF THE GREAT LAKES FLEET WAS EMPLOYED. THE SEVEN LARGE STEEL COMPANIES LOST $3.15 BILLION IN 1982. EVERY COST MUST BE CONTROLLED IN ORDER TO SURVIVE.

IT IS THE POSITION OF OUR ASSOCIATION THAT NO USER TAX

LEGISLATION FOR O&M OF DEEP WATER PORTS SHOULD BE ENACTED UNTIL A